Hon John Key
Prime Minister

20 April 2009
Speech

Speech to Grey Power Annual Meeting, Marton

Thank you for inviting me to speak to you this evening.

I'd like to acknowledge Simon Power, your President Les Howard and the Board of Grey Power, and the many delegates who have travelled here from around the country.

It's great to be at your AGM again.

There have been a few changes since I spoke to you in Christchurch last year.
Last November, the National Party won a popular mandate to lead a new Government, and we put that Government together swiftly with the help of our support parties - Act, United Future, and the Maori Party.

Since then, we have been working hard to deliver on the promises we laid out in the election campaign and to address the issues that matter to New Zealanders.

We have completed all the actions we promised to deliver in our first 100 days in office - on the economy, law and order, education, health and electoral reform.

And we are continuing to put in place our Jobs and Growth Plan to protect New Zealanders from the sharpest edges of the global recession and to prepare for future growth.

I will speak in more detail about our progress in government shortly, but before I do that, I'd like to thank you for the good work you do as a voice for the over-50s.

Grey Power has a long history of standing up for the interests of older New Zealanders and I appreciate the good relationship you have with the National Party and with our Ministers, and particularly with our Minister for Senior Citizens John Carter. The Government and Grey Power may not always agree, but we will always listen to your concerns.

Because it is important that we acknowledge - as a nation and a government - the huge contribution that older New Zealanders make to our families, our communities, and our country.

And it is just as important that we ensure older New Zealanders are treated with the respect and the dignity that they deserve.

With this in mind, I was pleased to read a few weeks ago about an OECD study into income distribution and poverty in the developed world. It found that only 2 per cent of older people in New Zealand were living below the poverty line, and that this was the best equal result among the 30 countries in the OECD.

This is not to say that we are perfect. I know that many older New Zealanders are struggling to cope with rising living costs and find it very hard to make ends meet.

But it is a sign of how well we respect and treat our older people.

And it's a sign of how important New Zealand Superannuation is for maintaining and supporting the incomes of our over-65s.

NZ Superannuation

NZ Super is particularly important right now.

The credit crisis and the global downturn is having a big impact on older people, many of whom live on fixed incomes.

The collapse in a number of finance companies has meant that many New Zealanders have lost savings.

And the dramatic fall in interest rates - which is good news for families with a mortgage - is bad news for those who rely on the income generated by their savings.

These factors reinforce just how important universal government-funded superannuation is.

I am aware that the OECD has recently suggested that the Government should look at raising the eligibility age for superannuation. I have a response to that suggestion - we will not be doing that.

The National-led Government is absolutely committed to maintaining current eligibility rules and NZ Super payments at a minimum of 66% of the average after-tax wage, rather than letting it drop back to 65%, as would otherwise have happened. As I said many times during the election campaign, I put my name behind that assurance.

In addition to this, the tax cuts on 1 April increased the after-tax average wage and this will raise superannuation payments in future years.

Tackling the Recession

New Zealand, along with the rest of the world, is facing a global recession on a scale we haven't seen for more than a generation. This is having some very serious implications.

Export volumes have fallen. Unemployment is rising. Many businesses are struggling. Families are finding it harder to make ends meet.

At the same time, Government revenues are going down and spending on unemployment benefits is going up. The Government is in deficit and Crown debt is rising.

There is, as you know, no magic lever we can pull to suddenly turn things around. But we are working hard to protect New Zealanders from the sharpest edges of this recession and to prepare for future growth.

We are doing this in four ways.
Firstly, we are providing a large fiscal stimulus to the economy by maintaining spending in areas such as health and education, and fast-tracking infrastructure investment. On top of this, we have delivered on our election promise to reduce personal taxes on 1 April.

The tax cuts will provide a billion-dollar boost to households. They are part of National's plans for rewarding effort and providing better incentives for New Zealanders to get ahead.

Secondly, we are supporting New Zealanders on low incomes by maintaining the entitlements they receive.

As well as continuing NZ Super payments at a minimum of 66% of the net average wage, we are maintaining funding for the SuperGold Card.

We are also maintaining Working For Families payments, student allowances, and benefits. And we are adjusting these over time so that they keep pace with inflation.

On 1 April we also lifted the minimum wage to help the most vulnerable workers tackle rising living costs.

Thirdly, we are getting better value out of government spending. We are continuing our line-by-line review of expenditure, reducing bureaucracy, eliminating low-value government programmes, and moving resources to the frontline.

We want New Zealanders to get better public services across the board, from the standard of education your grandchildren get at school, through to the standard of care you get in our hospitals - and I'll talk a bit more about that shortly.

Finally, we are continuing to put in place our Jobs and Growth plan. This is a 'rolling maul' of initiatives aimed at retaining and growing jobs and preparing the economy for future growth.

This includes the retail and wholesale deposit guarantee schemes introduced at the end of last year. The government now guarantees deposits in New Zealand banks, and many building societies, credit unions, and finance companies.

We have introduced temporary additional support through our ReStart Package for those worst hit by redundancy. ReStart is already helping around 1400 families.

We have launched our Small Business Relief Package which makes it simpler and less expensive for small businesses to manage cash flows and pay taxes.

We are fast-tracking $500 million of infrastructure investment in school improvements, state housing upgrades, and roading projects. We are also investing $1 billion extra in the state highway network over the next three years.

We are reducing red tape to remove the barriers that stand in the way of improving our infrastructure and encouraging investment in new industries and jobs. We have started streamlining and simplifying the Resource Management Act, and we will also reform the Building Act.

We are developing the best ideas from the Prime Minister's Job Summit. These include the "nine-day working fortnight", increasing education options for young people, and the national cycleway.

The Job Support Scheme is already helping workers keep their jobs at Fisher & Paykel, and Summit Wool Spinners in Oamaru. Around 60 other businesses are considering joining the scheme.

Finally, our first Budget will set out a credible medium-term plan for economic recovery and getting the Government's finances in order.

Together, these initiatives are designed to help boost jobs and get our economy growing again.

Because, despite the gloom, we need to realise that we are in a better position than many other countries.

Our banking system is in better shape than most. Our interest rates have fallen a long way, and quickly. And we have some natural advantages that I believe will see us come through this recession a lot quicker and better than other countries.

We produce a lot of food, and we do that extremely well. Visitors want to come here, see our unique landscape, and share our cultural experiences.

And we have people who are extremely creative and clever at doing amazing things with some pretty scarce resources.

Yes, we are in for a rough patch.

But I'm confident we can come through this recession more strongly than most countries, and that these tough times can be a springboard for better times ahead.

In the meantime, we will continue to address the issues that matter to New Zealanders.

Electricity Prices

Rising power bills are a major concern for people on fixed incomes. Many older people tell me that they go to bed earlier in winter to keep their power bills down.

Just as there is no magic lever we can pull to turn our economy around, there is no magic switch we can throw to suddenly turn on cheaper power. But there are a number of steps we are taking which are designed to constrain the growth in power bills.

We have started reforming the Resource Management Act. This will reduce the costs, uncertainties, and delays associated with new projects, and make it easier and cheaper to build new power stations.

We have started streamlining investment in Transpower's transmission network, so that upgrades in the National grid can happen more quickly and efficiently. By improving the grid, electricity from different power plants will be able to move around the country more easily.

We have announced a wide-ranging Ministerial Review into the electricity market. This will look at the performance of the market, electricity regulation, and governance issues. It may be that the review throws up some sensible short-term improvements that can be made fairly quickly. If this is the case, we will act on these immediately.

And before Easter, we announced plans to work with the Green Party to fund a home insulation, clean heating, and energy efficiency programme which will start no later than 1 July. We will have more to say about this soon.

In the short term, these four steps won't have a big effect on power bills. But over the longer term, I expect that they will help constrain electricity prices and that we will see fewer stories about electricity retailers putting up power prices ahead of inflation.

Health

Health is another area where we are determined to make big improvements.

As you know, in recent years our public health system has been struggling.

We have a chronic shortage of nurses and doctors. We have long waiting lists for elective surgery and appointments with a specialist. We have 21 District Health Boards running deficits that total around $160 million. Too much money is being tied up in bureaucracy and red tape, and not enough is getting through to frontline care for patients.

National has a plan to tackle these problems and provide better, sooner, more convenient care for those who need it. This plan has four major goals.

Firstly, we will give doctors and nurses more say over how healthcare is provided, by establishing clinical leadership and clinical networks across the system. Around the world, clinical leadership is recognised as a big driver of better healthcare.

Secondly, we need to save the public health system from its slide into financial crisis, and restore it to financial health.

Thirdly we will shift from the current centrally-driven health system which is hugely bureaucratic, towards a more sector-driven health system.

And fourthly, we will reduce waiting times for elective surgery such as hip replacements. The number of elective surgeries that are performed needs to more than keep pace with population growth and our aging population.

We have already taken some important steps.

We have announced the first of several elective surgery supercentres to reduce hospital waiting lists, and we will train the extra doctors and nurses to staff them.

We are funding a 24-hour Plunket-line service and a full 12-month course of Herceptin for Her-2 positive breast cancer sufferers.

And we have launched a "voluntary bonding scheme" that offers student loan write-offs to graduate doctors, nurses, and midwives who agree to work in hard-to staff communities or specialties.

You can expect to see lots more progress in coming months towards lifting the quality and performance of our health system and the frontline care that patients receive.

Law and Order

The front line of law and order is another area in desperate need of support, and we have taken some big steps since coming into office.

I would like to acknowledge the great work that Simon Power has been doing as Minister of Justice to deliver on our election promises and confront violent crime.

In our first one hundred days we passed new laws that make it harder for the wrong people to get bail, and provide tougher sentences for crimes against children.

We also introduced several new bills that we are driving through Parliament.

These pieces of legislation clamp down on gangs by doubling penalties for participation in a criminal gang, and make it easier for police to intercept gang communications.

They allow police to issue on-the-spot protection orders for suspected victims of domestic violence.

They put victims at the centre of the justice system by requiring offenders to pay into a Victim Compensation Fund.

They enable police to collect DNA from people they arrest and 'intend to charge', and to match their DNA against samples from unsolved crimes.

And they would remove the right for the worst repeat violent offenders and the worst murderers to get parole.

We have started training new police officers to boost the number of frontline police by 600 before the end of 2011. This includes 300 new police officers for South Auckland.

We have also introduced legislation that targets youth offenders.

This gives the Youth Court the power to issue a new range of compulsory orders including parenting lessons, mentoring programmes, and drug and alcohol rehabilitation.

It extends the jurisdiction of the Youth Court to include 12-and 13 year-olds accused of serious offences. And it creates tougher, more effective sentences, including a military-style activity camp programme that targets the most serious young offenders.

This programme will consist of up to three months residential training, using army-type facilities or training methods. It will provide clear boundaries, and reinforcement of self-discipline, personal responsibility, and community values. And it will include up to nine months of intensive support and mentoring to meet each young offender's individual needs.

But we also know that we can't just tackle violent crime with a prison van at the bottom of the cliff.

That's why last month Simon hosted a Ministerial Meeting on the Drivers of Crime attended by 100 experts from around the country. I expect this will, over time, lead to a number of initiatives that result in less crime, safer communities, and fewer victims.

Conclusion

Whether it is tackling violent crime, improving our health system, confronting rising electricity prices, or responding to the recession, the new Government is doing what we were voted in to do - take action on the issues that matter to New Zealanders.

We are delivering on the promises we made in the election campaign.

We are maintaining the entitlements that people receive - including NZ Super.

And we are protecting New Zealanders from the sharpest edges of the recession and preparing for future growth.

Before I go tonight, there is one last thing I want to say about the National-led Government and our relationship with you.

It's the same thing I have been saying to audiences around the country. The government does not have the answer to every problem. There is only so much we can do. The challenges we face in this recession and in every policy area are challenges that we can only solve by working together with all New Zealanders.

I started this speech by acknowledging the huge contribution that older people make to their families, our communities, and our country.

And I want to end by pointing out that in these challenging times, your experience, your insights, and your wisdom are more valuable than ever.

Thank you very much.

ENDS

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